That should be easy to remember based on this latest satellite image of the expansive Earl. Stay ready, everyone. (via NOAA … click here for larger version)

That’s where the world’s most unusual insurance policies come into play. Take Troy Polamalu for example. The Pittsburgh Steelers strong safety hasn’t cut his mane in a decade out of devotion to his Samoan ancestors. His flocks landed him an endorsement deal with Head & Shoulders and as a risk management measure, the company, just this week, took out a $1 million policy on his hair. But that’s not the only oddly insured part of the body that has caught the attention of the media.

David Beckham, the hunky English soccer star, wanted to protect that which he uses to make millions as a footballer. With that in mind, he took out a $195 million deal to protect not only his legs, feet and toes, but also his face in the event of disfigurement (since he uses his good looks to score endorsement deals).

Jeff Beck, an iconic English rock guitarist, was ranked 14th in Rolling Stone Magazine’s list of the “100 Greatest Guitarists of all Time.” To protect his famed fingers, Beck took out an insurance policy of $1 million — per finger. Apparently, he came to realize he needed protection after slicing off the tip of his index finger while slicing carrots. Maybe he’ll hire a chef as an additional risk management measure.

Bruce Springsteen has a million dollar voice — literally. The New Jersey-bred crooner insured his voice with the Lloyd’s of London for $6 million. Keep on rockin’ Bruce.

To see the entire list of the “Top 10 Oddly Insured Body Parts,” published by Time, click here.

The trajectory also doesn’t bode well for good weather this weekend on the coast of Maine, which is a particular bummer for me since I will be up there trying to enjoy the best state in America for the next few days. (I grew up there.) Ultimately, however, I won’t mind too much as long as the storm brings only heavy rains and winds and doesn’t become a swift-moving Category 2 hurricane that makes it much further north than it should.

UPDATE: And in case any of you still aren’t taking this storm seriously, here’s something that should make you take notice about the enormity of Earl’s reach.

Earl covers about 166,000 square miles — larger than California, which covers just under 160,000 square miles. The storm’s outflow, or the clouds associated with it, could stretch from one end of the state of Texas to the other, said CNN meteorologist Reynolds Wolf.

That’s a lot of wind.

Projected Path

Possible Paths

(via CNN)

What’s the best type of insurance to cover businesses against disasters?

Brian Smith: There are two areas of coverage that must be considered when facing the decision to purchase business insurance: property and business interruption. Property insurance will protect against damage to the physical condition of the business along with the items that sustain operations, such as equipment and fixtures. Property insurance is a mainstay in commercial programs, oftentimes required and rarely overlooked. Business interruption insurance, however, is often undervalued; it is the most critical program needed to sustain operations during a disaster. There are seven points a business owner should consider if questioning the need for business interruption coverage:

1. It allows the owner to recoup lost sales and income of the business;
2. While the business is down due to the disaster, it will allow the operations to continue during rebuilding;
3. Income and profits are protected;
4. By staying afloat, the business will be able to retain key clients and contracts;
5. Business interruption insurance allows for the employer to keep ALL employees;
6. As mentioned, property insurance and business interruption claims are often LARGER than the property loss;
7. And finally, the business will likely receive a more rapid and equitable loss settlement on the property claim.

Do different types of companies require different types of insurance and does the business’ location matter in such a decision?

BS: Each company will have its own unique risks associated with it. These must be evaluated by a commercial insurance professional to determine the right coverage for the identified exposures. Taking into consideration the location of a business, however, is one of the key factors. Distance from the coast is one factor, due to exposure to natural disasters such as hurricane and flood. In this case, flood is highly recommended and may be required based on banking terms or contractual needs. An additional type of coverage within the business interruption arena is contingent business interruption. This type of insurance protects the business against a loss due to a dependency on one buyer, supplier, manufacturer or leader property such as in a mall or shopping plaza.

Is now a good time to reassess commercial insurance coverage? If so, why?

BS: The answer here is a resounding YES! Commercial insurance rates are very low at this point. The insurance industry is facing its sixth year of a “soft market,” where insurance companies have lowered rates to unprecedented levels. Insurance program development during this time is highly recommended due to opportunities involving greater coverage, competitive rates and new client demands on both the insurance companies and insurance agencies. Engaging a commercial insurance professional is the best way to see where improvements can and should be made based on operation, location and physical hazards.

Is National Preparedness Month a tool to encourage businesses to analyze their stage of disaster preparedness? How?

BS: I believe it is. The U.S. Department of Homeland Security is shepherding this program at the state and national level. Accompanied by several commercial and personal insurance providers/groups, this national marketing campaign can bring a level of awareness needed for home and business exposures. Coinciding the hurricane season, any awareness program that brings to light what needs to be considered in the event of disaster is always welcome.

What else should businesses know about the importance of being covered from disaster?

BS: Business owners should be aware of the possibility that current insurance programs may be under-estimated or inadequate. A comprehensive review of key items identifying areas of exposure should be considered on an annual basis. Review of current insurance policies is necessary to ensure coverage levels are accurate as well as appropriate. New or changing business operations can have a substantial impact on the monetary needs of a company should it be impacted by a natural disaster. Insuring these exposures properly can only be done if each is understood by the owner and insurance agent and steps are taken to include these values on the current or renewing program.

On August 29, 2005, the levees that were supposed to protect New Orleans failed catastrophically. The United States Army Corps of Engineers simply did not do the job it was tasked to do. As such, it was found liable for the flooding in court.

“It is the court’s opinion that the negligence of the Corps, in this instance by failing to maintain the MRGO properly, was not policy, but insouciance, myopia and short-sightedness,” U.S. District Court Judge Stanwood Duval Jr. wrote in his lengthy ruling, referring to the Mississippi River-Gulf Outlet canal.

“For over 40 years, the Corps was aware that the Reach II levee protecting Chalmette and the Lower Ninth Ward was going to be compromised by the continued deterioration of the MRGO … The Corps had an opportunity to take a myriad of actions to alleviate this deterioration or rehabilitate this deterioration and failed to do so. Clearly, the expression ‘talk is cheap’ applies here.”

Clearly, the man-made protection was not up to par. The storm surge that rushed inland was too great for it to restrain.

As many have noted in the past five years, however, there were other safeguards that historically protected New Orleans: coastal wetlands and barrier islands. But for decades, as National Geographic notes, these were allowed to erode away to the point that they could offer little resistance to the rising tides that ultimately breached the levees.

When Hurricane Katrina smacked the Gulf Coast in August 2005, the protection from powerful storm surges provided by coastal wetlands and barrier islands had gradually been whittled away. Since the 1930s, Louisiana had lost 1.2 million acres of coastal wetlands. More than two dozen dams and thousands of miles of levees on the Mississippi River had trapped sediment that otherwise would have replenished them. At the same time, wetlands were drained and filled to enable oil and commercial development in the Gulf region. Even as the Army Corps of Engineers failed to adequately maintain levees to keep the floodwaters at bay, this loss of natural protection worsened the catastrophe.

Of course, this is not an issue unique to New Orleans.

Across the globe, protective wetlands are disappearing. At the same time, coastal populations are expanding. The combination is deadly and means that wind storms and flooding that would have been less catastrophic to society just a few decades ago are now inherently capable of creating more damage more easily to more people. The NatGeo piece uses the current, historic flooding in Pakistan and the 2004 Indian Ocean tsunami as examples of major disasters that could have been less disastrous if the natural protective barriers had not been allowed to degrade so dramatically.

With some investment, however, scientists believe that such ecosystems can be restored and again provide protective benefits.

Just as we buy home insurance and life insurance to protect ourselves and our families from catastrophic losses, so society now needs to “buy” disaster insurance to reduce the damage caused by floods and other weather-related events. By strategically investing in the protection and restoration of ecological infrastructure, we can begin to re-gain the benefits of nature’s services.

Some nascent efforts in this direction have at least been floated. Within a month of the Asian tsunami, officials in Indonesia–where more than 126,000 of the tsunami deaths had occurred and where some 1.6 million acres of coastal mangroves had been lost in the preceding few decades–announced a large-scale effort to restore the nation’s mangrove defenses. In the aftermath of Katrina, U.S. scientists have been studying the idea of diverting Mississippi River water back toward Louisiana’s disappearing coastal swamps, to supply the nutrients and sediments needed to rebuild them.

Overall, however, the story is one of inertia, neglect and missed opportunity. After the Great Midwest Flood of 1993, U.S. researchers estimated that restoration of 13 million acres of wetlands in the upper portion of the Mississippi-Missouri watershed, at a cost of $2-3 billion, would have absorbed enough floodwater to have substantially reduced the $16 billion in flood damages from that event. But instead of calling floodplains and wetlands back into active duty, officials in the region permitted even more floodplain development. Nicholas Pinter of Southern Illinois University estimates that 28,000 new homes and 6,630 acres of commercial and industrial development have since sprung up on land that was under water in 1993.

I interviewed former FEMA head James Lee Witt in 2008 (following the Sichuan earthquake in China and Cyclone Nargis that hit Burma soon after), and he was a proponent using natural barriers as well. Here he highlights one of the initiatives he enacted along the riverbanks of the Red River after devastating flooding there in 1997 caused some $3.5 billion in damages.

We utilized the mitigation and buy-out relocation programs [after the flood]. Mayor Pat Owens in Grand Forks [North Dakota] and Mayor Lynn Stauss in East Grand Forks [Minnesota] took all that space and turned it into green, open-space parks. And the Army Corps of Engineers did a fantastic job on the levee work there. You should see that town now. It is a model of prevention.

Mayor Strauss in East Grand Forks took the area we bought out-which still had all the infrastructure, streets and huge trees right along the river-and turned that into an motor home park where people can camp in the summer. It turned into an absolutely beautiful city.

The lesson in all this is that prevention, both natural and man-made, must be prioritized by city planners. If there is a threat of flooding, particularly if the natural barriers that have historically protected the city are disappearing, the municipality must find a way to refortify its shorelines and riverbanks.

Unfortunately, those who propose anything with the words “restore” and “ecosystem” in the same sentence are often quickly dismissed as tree-huggers who are overly concerned with protecting wildlife. With city and state budgets stretched thin, that is not something many citizens can get behind. But it is not about saving the whales — it is about saving people.

And, ultimately, from a protection standpoint, man-made barriers can be just as good in many locations. In New Orleans, for example, they are nearing the completion of a new protection system.

Nearly five years after Katrina and the devastating failures of the levee system, New Orleans is well on its way to getting the protection system Congress ordered: a ring of 350 miles of linked levees, flood walls, gates and pumps that surrounds the city and should defend it against the kind of flooding that in any given year has a 1 percent chance of occurring.

The scale of the nearly $15 billion project, which is not due to be completed until the beginning of next year’s hurricane season, brings to mind an earlier age when the nation built huge works like the Brooklyn Bridge, the Hoover Dam and the Interstate highway system.

The city’s reinforced defenses are already stronger than they were before Katrina. But even after 2011, experts argue, they will still provide less protection than New Orleans needs to avoid serious flooding in massive storms.

This new system is not a Dutch-level engineering marvel that will hold back virtually anything short of Armageddon. You would think that the the death of so many New Orleans residents would have spurred the same “never again” mentality that the Dutch took after they lost 2,000 of their citizens to a flood in 1953 — not the creation of a 100-year protective system (meaning that those who construct it essentially expect it will likely fail within a century when an unusually strong, but not unthinkably strong, storm strikes).

But it is certainly a vast improvement over what existed in 2005.

Now, if we can just get other areas to see the importance of holding back floodwaters before they devastate the community, we will really be making some progress.

Now, as the storm heads north, the $64,000 question (or perhaps more accurately, the $64 billion question) is whether or not the mid-Atlantic, or even the Northeast, can avoid a direct hit. In the video below, FEMA Administrator Craig Fugate discusses the threat.

“History tells us that we have had very dangerous storms that have hit the Northeast before,” said Fugate. “As the Hurricane Center is telling everybody, from the Carolinas to Maine, you really need to pay attention to this storm and make sure you’re ready and have a plan today — you may not have time later this week.”

To help prepare, he suggests going to Ready.gov, and to put the severity of the threat into even greater perspective, he also discusses possible evacuations. “Hopefully, we won’t have to evacuate, but we need to be prepared,” he said. “What I tell people for this [Labor Day] weekend is ‘just be flexible’ until we see what this storm is doing. You need to have that flexibility in case your plans need to change.”

The second video, also from ABC’s Good Morning America, discusses the latest meteorological info, showing the potential tracks for Earl (and the looming storms Fiona and Gaston that may follow) as it moves north. One possible trajectory has the storm coming within 30 miles of the Carolina coast by Thursday.

Along with a new wave of bed bug infestations in New York City has come a lot of reputation damage to local companies. The critters forced an Abercrombie & Fitch store to close up shop. A movie theater in Times Square had to hose down its seats to kill bedbugs living in its seats. And apparently even the mannequins in a Lexington Ave Victoria’s Secret were alluring enough to the little guys that the store had to be shut down.

It’s tough to gauge the exact bottom line impact, but such headaches are becoming increasingly common for stores — particularly now that the bedbug resurgence seems to be widespread and customers are growing increasingly creeped out.

And it is becoming increasingly clear that one major hurdle to eradicating the pests is that no one really knows that much about them, mostly because they don’t actually transmit disease and, thus, don’t pose the same health risks to humans that, says, ticks or lice do.

Bedbug research “has been very limited over the past several decades.”

Ask any expert why the bugs disappeared for 40 years, why they came roaring back in the late 1990s, even why they do not spread disease, and you hear one answer: “Good question.”

The article goes on to explain pretty much all the info that scientists do know for sure about bedbugs in just a few paragraphs.

The bugs are “nest parasites” that fed on bats and cave birds like swallows before man moved in.

That makes their disease-free status even more baffling.

(The bites itch, and can cause anaphylactic shock in rare cases, and dust containing feces and molted shells has triggered asthma attacks, but these are all allergic reactions, not disease.)

Bats are sources of rabies, Ebola, SARS and Nipah virus. And other biting bugs are disease carriers — mosquitoes for malaria and West Nile, ticks for Lyme and babesiosis, lice for typhus, fleas for plague, tsetse flies for sleeping sickness, kissing bugs for Chagas. Even nonbiting bugs like houseflies and cockroaches transmit disease by carrying bacteria on their feet or in their feces or vomit.

But bedbugs, despite the ick factor, are clean.

There is plenty of speculation about why they disappeared for around four decades (DDT perhaps) where they come from (foreign travelers, say pest control companies) and how to get rid of them (gun powder and even Zyklon B were tried in the old days), but there is very little concrete information to rely on.

So it seems that those companies that have been affected, particularly in these 15 most-infested cities, have nowhere to turn for help. And according to this article, the current remedies are not only unreliable — they are ungodly expensive.

The cost of treating a single hotel room is estimated at $6,000 to $7,000. The problem is even worse if a customer alerted the hotel to the problem: Given the danger of a bedbug stigma, hotels often go to extremes to ensure that customers are pleased with their attentiveness. According to an article in Bloomberg BusinessWeek, one Las Vegas hotel’s standard procedure for bedbug complaints is to move customers to new rooms, dry clean all their clothes, and replace their luggage with new, uninfested bags.

(See what I did there?)

As we look back upon the fifth anniversary of worst hurricane in U.S. history, two windstorms churn through the Atlantic. The first, Danielle, fortunately veered away from the coastline, its destructive power withering by the hour. The second, Earl, on the other hand, is strengthening, with sustained winds already reaching 135 mph and a trajectory that has the whole Eastern Seaboard on watch.

Katrina taught us many things about disaster preparedness and response. It gave us vivid, appalling visions of a new worst-case scenario. Even more powerfully, Spike Lee put together two gripping documentaries that unveil the true, long-term magnitude of the tragedy, the second of which, If God Is Willing And Da Creek Don’t Rise, recently premiered on HBO and is a much-watch look into just how much the city has suffered — without crumbling — since the floodwaters receded.

At Risk Management magazine, ever since the storm, we have tried to tell some of the city’s other stories. I wrote an article about the New Orleans Museum of Art’s harrowing days after the storm and the commando art restoration team that saved collections throughout the city. Another story detailed how a casino risk manager in the midst of a major merger had to deal with $1 billion in lost property after his company’s riverboat was thrown 2,000 feet by storm surge. And we tried to find some semblance of a silver lining by offering these lessons that all of us can learn from a disaster of this magnitude.

Unfortunately, it seems as though few lessons have actually been learned. Oh, they have been discussed ad nauseum and the outrage expressed has generally been genuine. But actual behavior has largely remained unchanged. Still, most people admit that they are unprepared for disasters.

Hopefully, most companies and organizations are more confident. But many are not — or at least have no cause to be. Along these lines, we plan to spend the rest of this week (and much of September, which is National Preparedness Month) remembering what happened on August 29, 2005, and emphasizing the importance of disaster preparedness and response.

I encourage you to click some of the links above and check back soon for more.

Someday, a major hurricane will strike New York City. Government forecasters concede they’ll be unable to give the City much notice, while the City’s emergency planners admit evacuation is impossible. It’s a recipe for disaster on a scale to dwarf Hurricane Katrina’s devastation of New Orleans, potentially leading to the largest natural catastrophe in American history.

As we all know, NYC is very much unprepared for the type of storm that frequents the warmer waters of the Gulf of Mexico. Some may recall the story of the Great Hurricane of 1938 that struck eastern Long Island and New England, killing more than 700 people, destroying more than 50,000 buildings and knocking down more than a quarter billion trees.

If a serious hurricane were to strike the NYC area today, it would undoubtedly be one of the most costly natural disasters in U.S. history. As the Insurance Information Institute states, New York has the highest total exposure to a storm.

Not to be a fear monger, but now let us look at the projected path of Hurricane Earl, courtesy of the National Hurricane Center (NHC). I understand that this is a projection through Saturday, which, when talking about the path of storms, is long-term and certainly not definitive. Still, the image is frightening (note how close to NYC the storm is projected Friday afternoon/evening):

Moments ago, Hurricane Earl reached category 3 status with winds near 120 mph, according to the NHC. We will keep an eye on updates from the center.

This is a good time for businesses to review their business continuity and disaster preparedness plans. There is no such thing as being too prepared.

So you know how BP and various others have been trying to sell us on the idea that the gargantuan oil plume in the Gulf of Mexico had somehow magically disappeared? Well, now some Berkeley scientists have confirmed that this actually may be happening, but it isn’t magic. A newly discovered microbe, a particularly gluttonous form of oil-eating bacteria that have existed for millions of years on the ocean floor, appears to have multiplied rapidly since the April 20 spill and gobbled up so much of the dispersed oil as to render the plume “undetectable.”

That is pretty amazing if this is actually going on. Nature, man. Truly remarkable.

Since scientists know science, I will cede all knowledge on the subject to the researchers doing the researching and hope to hear more good news about the Gulf cleaning itself. But, I think FSist’s take is pretty well aligned with my own.

We remain slightly skeptical, but consider our minds blown.

Blown indeed.